I was just thinking about YouTube’s business model because why not, and I saw a video from 2009 show up. They’ve been paying hosting fees on that one specifics video since, and doesn’t look like it’s generated much ad revenue for the past few years. But the hosting fees are a constant. With the amount of content YouTube has to host constantly growing, how are they able to stay financially afloat? What happens when they reach market cap and users are generating the maximum amount of ad revenue possible?
edit: typo in the title my bad
In: 2
Hosting costs are not constant. Content that is popular gets distributed over many servers on YouTube’s content delivery network (CDN) so that they can keep up with demand. This means multiple copies of this content exist on different servers. Content that is rarely accessed gets stored only once (with a backup, but that’s it) in YouTube’s main database. And that’s just the storage side. Delivering the video to a viewer also has a cost to it. So all in all, it’s much cheaper to host a video that rarely gets any streams, and more expensive to host one that gets played a lot.
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